Cambodia yesterday signed deals for about US$430 million in loans from China, the latest in a number of high-profile borrowing deals with its northern neighbour.
The bulk of the loans, from Export-Import Bank of China, would go towards two national road projects and a multipurpose dam in Battambang, according to documents obtained by the Post.
An extension on the rehabilitation of National Road 6 alone was set to cost about $250 million.
The signing ceremony, chaired by Prime Minister Hun Sen and China Politburo Standing Committee member He Guoqiang, generated fierce criticism from the opposition Sam Rainsy Party, which called the borrowing opaque.
The Kingdom signed on for $302 million in similar loans from China in February.
Although an exact figure for Cambodia’s debt to China has been disputed, Minister of Economy and Finance Keat Chhon in February said the figure stood at about $1.8 billion.
The prime minister yesterday touted the borrowing as a boost to the development of Cambodia.
“China’s progress has led to harmony in neighbouring countries including Cambodia,” Hun Sen’s personal adviser Eang Sophallet quoted the premier as having said.
“Chinese aid has not only helped the development of Cambodia’s economy, it has also helped Cambodia to be independent.”
Yesterday’s signing also included a $2 million deal with China’s biggest technology company Huawei for what the document called a “Hotline and Traffic Control Project”. Officials at the company could not be reached.
A $550,000 hospital project donated by the China Foundation for Peace and Development, as well as the delivery of two Chinese-built MA60 aircraft, was also noted in the document.
The International Monetary Fund and the World Bank earlier this year called Cambodia’s debt levels stable, but questioned the country’s ability to manage future economic crises if borrowing continued.
A joint report issued by the two institutions in late February estimated Cambodia’s foreign debt at about 28 per cent of gross domestic product for both 2011 and 2012.
Although debt levels were projected to increase from about $4 billion to $5.6 billion over the next four years, its share of GDP will decrease by about a percentage point to nearly 27 per cent.
Yim Sovann, spokesperson for Sam Rainsy Party, said access to information concerning Cambodia’s debt to China was restricted, even to members of parlament.
He claimed that the Kingdom’s external debt was more than $6 billion, at least a third of which was owed to China.
“These loans are dollars that Cambodian citizens owe and have to pay back through tax payments. The most important thing is to curb the corruption that leads to these failures in transparency,” he said.
The lending, which China has often advertised as having “no strings attached”, entitled Chinese companies to exploit Cambodia’s mineral wealth and land concessions, he added.